Creative 2008 Annual Report Download - page 31

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31
Other accruals of $38.3 million and $29.6 million as of June 30, 2008 and 2007 includes accruals for various operating
expense items that individually account for less than 5% of the total current liabilities.
฀As฀of฀June฀30
฀ 2008฀ 2007
Long฀term฀obligations:฀
฀ Long฀term฀debt฀ ฀ $฀ –฀ $฀ 113,711
฀ Capital฀lease฀obligations฀ ฀ ฀ 10฀ ฀ 21
฀ Deferred฀tax฀liabilities฀ ฀ ฀ 18,044฀ ฀ 15,399
฀ Liability฀for฀uncertain฀tax฀positions฀ ฀ ฀ 11,702฀ ฀ –
฀ ฀ ฀ ฀ Total฀long฀term฀obligations฀ ฀ $฀ 29,756฀ $฀ 129,131
NOTE 4 – ADVANCE PAYMENTS FROM SALE OF BUILDING
As discussed in Note 3, under SFAS 98, the transaction did not meet certain criteria of sale-leaseback accounting, and
accordingly the sale proceeds received, net of the security deposit and rental prepayment, is presented as “Advance payments
from sale of building.”
NOTE 5 – PRODUCT WARRANTIES
The warranty period for the bulk of Creative’s products typically ranges between 1 to 3 years. The product warranty accrual
reflects management’s best estimate of probable liability under its product warranties. Management determines the warranty
provision based on known product failures (if any), historical experience, and other currently available evidence.
Movements in the product warranty accrual for fiscal year 2008 were as follows (in US$’000):
฀As฀of฀June฀30
฀ 2008฀ 2007
฀ ฀ ฀ ฀ ฀
Balance฀at฀the฀beginning฀of฀the฀year฀ ฀ $฀ 6,499฀ $฀ 9,536
Accruals฀for฀warranties฀issued฀during฀the฀period฀ ฀ ฀ 18,903฀ ฀ 28,420
Adjustments฀related฀to฀pre-existing฀warranties฀(include฀changes฀in฀estimates)฀ ฀ ฀ (214)฀ ฀ (580)
Settlements฀made฀during฀the฀period฀ ฀ ฀ (19,373)฀ ฀ (30,877)
฀ ฀ ฀ ฀ Balance฀at฀the฀end฀of฀the฀year฀ ฀ $฀ 5,815฀ $฀ 6,499